Turkish Textile company, Sahinler Ethiopia Textile Investment plc, received a 628 million birr loan from the Development bank
of Ethiopia. The company is expected to engage in the manufacture of clothing, knitted items and a range of items at its plant in Adama.
The company originally applied for a loan of 1 billion birr according to anonymous sources.
The Development bank generally gives less money than what is requested because companies tend to inflate their financial requirements due to budget or currency exchange rate consideration explained Tadesse Hatiya, Vice President of Credit Services with DBE.
The research department of the bank verifies the value of imported equipment and other items when a loan application is received and the findings are taken into account before a final decision is issued in regards to the loan he explained.The bank looks at the projects in total as part of the loan arrangement unlike commercial loans when the collateral is the main means of guarantee and thus usually releases the funds in stages after the loan is approved to monitor the progress of the project added Taddesse.
It is to be remembered that the Development Bank issued 1.42 billion birr to Saygin B.M Technology Group LLC, another Turkish company, in one of its largest loan arrangements. The company had requested 2.1 billion birr for the construction of a cable manufacturing plant.
The bank is currently in the process of evaluating 30 loan requests estimated at 3.2 billion for projects in areas including manufacturing, food processing, plastic packaging, cable manufacturing, coffee farming, bio-fuels, health equipment, education, and pharmaceuticals amongst others.
Source: Capital
